[exelius]

I used to buy into the hype too, but Bitcoin has some serious scalability problems to overcome that will likely end up degrading its cost advantage relative to traditional payment processing. Furthermore, Bitcoin does not implement a number of consumer protections that are legally mandated in most western countries - those protections will need to be implemented by service providers like Coinbase, which will further drive up costs into the range of traditional payment providers.

Bitcoin only allows people who are unbanked to hold and transmit money if they can use it - a point brought up in the article. It's a chicken and egg problem: nobody is going to use Bitcoin until a lot of other people are using it. It's much like a fiat currency in that sense, except there's no central authority pushing it with the authority to mandate its use. It's currently far too volatile, and will remain so as long as speculators are the primary market participants.

Ultimately, there's not going to be a global revolution overthrowing the existing financial system. I expect BTC (or rather, the ideas/technology behind BTC) to be regulated and absorbed by the global financial system because, ironically, its best feature is that it synchronizes a single view of global transaction logs, making it MUCH easier for investigators to trace the flow of money across the globe. If laws are enacted that force payment providers to keep documentation of who owns blockchain addresses and to only transmit funds to verified blockchain addresses (similar to existing money laundering laws), the anonymity goes away and you have a record of every financial transaction that can be traced back to the individual who submitted it. Bitcoin won't be allowed to be a loophole to global financial regulation, but it may just become the mechanism of enforcement.